UFP INDUSTRIES INC

Previous wording

We believe that our operating structure allows us to better evaluate market conditions and opportunities and more effectively allocate capital and resources to the appropriate segments and business units. Also, we believe our diversification and manner in which we operate our business provide an inherent hedge against the business cycles our end markets experience and over which we have limited control. Accordingly, we have the ability to provide more stable earnings and cash flows to our shareholders. Our diversification and operating practices also mitigate the impact that more volatile lumber market conditions have on traditional lumber companies. We are headquartered in Grand Rapids, Mich.

Current wording

We believe that our operating structure allows us to better evaluate market conditions and opportunities and more effectively allocate capital and resources to the appropriate segments and business units. Also, we believe our diversification and manner in which we operate our business provide an inherent hedge against the business cycles our end markets experience and over which we have limited control. Accordingly, we have the ability to provide more stable earnings and cash flows to our shareholders. Our diversification and operating practices also mitigate the impact that more volatile lumber market conditions have on traditional lumber companies. We are headquartered in Grand Rapids, Michigan.

Previous wording

Our results for the second quarter of 2025 include the following highlights:

Current wording

Our results for the third quarter of 2025 include the following highlights:

Previous wording

Higher overall lumber prices in 2025 compared to 2024 is primarily due to recent production curtailments. A change in lumber prices impacts profitability of products sold with fixed and variable prices, as discussed below.

Current wording

A change in lumber prices impacts profitability of products sold with fixed and variable prices, as discussed below.

Previous wording

We generally price our products to pass lumber costs through to our customers so that our profitability is based on the value-added manufacturing, distribution, engineering, and other services we provide. As a result, our dollar sales levels (and working capital requirements) are impacted by the lumber costs of our products. Lumber costs were 42.9% and 38.9% of our sales in the first six months of 2025 and 2024, respectively.

Current wording

We generally price our products to pass lumber costs through to our customers so that our profitability is based on the value-added manufacturing, distribution, engineering, and other services we provide. As a result, our dollar sales levels (and working capital requirements) are impacted by the lumber costs of our products. Lumber costs were 41.4% and 38.6% of our sales in the first nine months of 2025 and 2024, respectively.

Previous wording

The proposed tariffs in Mexico and Canada continue to be paused. If they are activated, the demand for domestic lumber products is expected to increase, which will likely result in higher costs as capacity gets challenged. Although the trade landscape continues to evolve, since we do not own any foreign sawmills and have excellent relationships with our mill partners, we believe we are currently in a strong position to adapt quickly to tariffs without material adverse financial impact after a short adjustment period. We will continue to monitor the market and intend to make decisions quickly to minimize disruption. As of June 28, 2025, 84% of our lumber purchases are from domestic suppliers and 16% are imported from Canada and other international suppliers.

Current wording

The proposed tariffs in Canada continue to be paused. If they are activated, the demand for domestic lumber products may increase, which will likely result in higher costs if capacity gets challenged. Although the trade landscape continues to evolve, since we do not own any foreign sawmills and have excellent relationships with our mill partners, we believe we are currently in a strong position to adapt quickly to tariffs without material adverse financial impact after a short adjustment period. We will continue to monitor the market and intend to make decisions quickly to minimize disruption. As of September 27, 2025, 77% of our lumber purchases are from domestic suppliers and 16% are imported from Canada, and 7% are imported from other international suppliers.

Previous wording

We completed one business acquisition in fiscal 2025 and one in fiscal 2024. The annual historical sales attributable to these acquisitions are approximately $32 million. These business combinations are not significant to our quarterly results and thus proforma results for 2025 and 2024 are not presented.

Current wording

We completed two business acquisitions in fiscal 2025 and one in fiscal 2024. The annual historical sales attributable to these acquisitions are approximately $49 million. These business combinations are not significant to our quarterly results and thus proforma results for 2025 and 2024 are not presented.

Previous wording

The following table presents, for the periods indicated, our selling, general, and administrative (SG&A) costs as a percentage of gross profit. Over time, we believe this ratio provides an enhanced view of our effectiveness in managing these costs given our strategies to enhance our capabilities and improve our value-added product offering and recognizing the higher relative level of SG&A these strategies require. This ratio also mitigates the impact of changing lumber prices. The increase in the ratio of SG&A as a percentage of gross profit from the prior year is primarily due to the impact of competitive pricing and higher material costs, which has reduced our gross profits.

Current wording

The following table presents, for the periods indicated, our selling, general, and administrative (SG&A) costs as a percentage of gross profit. Over time, we believe this ratio provides an enhanced view of our effectiveness in managing these costs given our strategies to enhance our capabilities and improve our value-added product offering and recognizing the higher relative level of SG&A these strategies require. This ratio also mitigates the impact of changing lumber prices. The increase in the ratio of SG&A as a percentage of gross profit from the prior year is primarily due to the impact of competitive pricing and higher material costs for most of the year, which has reduced our gross profits.

Previous wording

Our overall unit sales of value-added products were down 4% in the second quarter and 1% in the first six months of 2025 compared to the prior year. Our overall unit sales of commodity-based products decreased approximately 4% in the second quarter and 3% in the first six months of 2025 compared to the prior year.

Current wording

Our overall unit sales of value-added products were down 6% in the third quarter and 3% in the first nine months of 2025 compared to the prior year. Our overall unit sales of commodity-based products decreased approximately 5% in the third quarter and 4% in the first nine months of 2025 compared to the prior year.

Previous wording

Net sales in the second quarter of 2025 decreased by 3% compared to the same period of 2024 due to a 7% decrease in units, partially offset by a 4% increase in selling prices. Unit changes within this segment consisted of decreases of 3% in Deckorators and 7% in ProWood. Our unit sales to big box customers, which we believe are more closely correlated with repair and remodel activity, decreased approximately 7%, while unit sales to independent retailers, which we believe are more closely correlated to new housing starts, decreased approximately 6%. Within our Deckorators business unit, our sales of railings declined 25%, wood-plastic composite decking was flat, and our mineral-based-composite decking (sold under our new Surestone tradename) increased 45%. The decline in our railing sales is due to lost market share with a big box customer which began impacting sales at the beginning of the year. Our sales or wood-plastic composite decking were also impacted by this loss of business. However, we gained market share with another big box customer which will begin to more favorably impact our sales beginning in July as initial stocking orders are received for one of our mineral-based composite decking products. Overall, for the remainder of this year, we believe we will benefit from a modest net gain in market share as we begin stocking approximately 1,500 stores and continue to add capacity to produce our mineral-based composite decking. We expect to realize the full benefit of our net market share gain in 2026. Our long-term goal is to double our market share of composite decking and railing over the next 5 years. The decline in ProWood volume is primarily due to soft demand due to higher interest rates and weaker consumer sentiment and ongoing efforts to discontinue sales of products that do not meet our profitability targets.

Current wording

Net sales in the third quarter of 2025 decreased by 7% compared to the same period of 2024 due to a 6% decrease in units and a 1% decrease in selling prices. Unit changes within this segment consisted of a 5% decrease in ProWood and 31% decrease in Edge as we complete the closure of our Bonner, Montana plants and transition production to other facilities, partially offset by a 5% increase in Deckorators. Our unit sales to big box customers, which we believe are more closely correlated with repair and remodel activity, decreased approximately 6%, while unit sales to independent retailers, which we believe are more closely correlated to new housing starts, also decreased approximately 6%. Of the 6% increase in net sales for our Deckorators business unit compared to the same period of 2024, wood-plastic composite decking and mineral-based-composite decking (sold under our new Surestone tradename) increased 9% and 31% from the prior year, respectively, partially offset by railings which declined 13% from the prior year. The decline in our railing sales is due to lost market share with a big box customer which began impacting sales at the beginning of the year. However, we gained market share with another big box customer which began to more favorably impact our sales beginning in July as initial stocking orders were received for one of our mineral-based composite decking products. Overall, for the remainder of this year, we believe our Deckorators business unit will benefit from a modest net gain in market share as we continue stocking additional stores and as the new capacity we’ve added to produce our mineral-based composite decking reaches our throughput targets. We expect to realize the full benefit of our net market share gain in 2026. Our long-term goal is to double our market share of composite decking and railing over the next 5 years. The decline in ProWood volume is primarily due to higher interest rates and weaker consumer sentiment resulting in a softening of demand to complete repair and remodel projects.

Previous wording

Gross profits decreased by $13 million, or 10% to $114 million for the second quarter of 2025 compared to the same period last year. The change in gross profit was attributable to the following:

Current wording

Gross profits decreased by $13 million, or 14% to $80 million for the third quarter of 2025 compared to the same period last year. The change in gross profit was attributable to the following:

Previous wording

SG&A decreased by $7 million, or 10%, in the second quarter of 2025 compared to the same period of 2024. Accrued bonus expense, which varies with the overall profitability and return on investment of the segment, decreased $4 million from the second quarter of 2024 and totaled $15 million for the quarter. This decrease, along with other smaller decreases in several accounts totaling $9 million, was partially offset by an increase in advertising of $6 million related to our efforts to build brand awareness of our Deckorators SureStone decking.

Current wording

SG&A decreased by $5 million, or 9%, in the third quarter of 2025 compared to the same period of 2024. Accrued bonus expense, which varies with overall profitability and return on investment of the segment, decreased $4 million from the third quarter of 2024 and totaled $8 million for the quarter. This decrease, along with a decrease in wages and benefits of $2 million and many other small decreases totaling $6 million, was partially offset by an increase in advertising of $7 million related to our efforts to build brand awareness of our Deckorators Surestone decking.

Previous wording

Net sales in the first six months of 2025 decreased by 3% compared to the same period of 2024, due to a 5% decrease in units, partially offset by a 2% increase in selling prices. Unit changes within this segment consisted of decreases of 6% in Deckorators and 5% in ProWood. Unit sales to big box customers decreased approximately 5%, while unit sales to independent retailers decreased approximately 6%. Within our Deckorators business unit, our sales of railings decreased by 31% and wood-plastic composite decking decreased by 3% due to the lost market share described above. These decreases were partially offset by a 36% increase in our mineral-based-composite decking as consumers continue to see the benefits of its superior product attributes.

Current wording

Net sales in the first nine months of 2025 decreased by 4% compared to the same period of 2024, due to a 5% decrease in units, partially offset by a 1% increase in selling prices. Unit changes within this segment consisted of decreases of 3% in Deckorators, 5% in ProWood, and 15% in Edge as we complete the closure of our Bonner, Montana plants and transition production to other facilities. Unit sales to big box customers decreased approximately 5%, while unit sales to independent retailers decreased approximately 6%. Within our Deckorators business unit, our sales of railings decreased by 26% due to the lost market share described above. These decreases were partially offset by a 34% increase in our mineral-based-composite decking as consumers continue to see the benefits of its superior product attributes and a 1% increase in wood-plastic composite decking.

Previous wording

SG&A decreased by approximately $7 million, or 6%, in the first six months of 2025 compared to the same period of 2024. The overall decrease was due to a decline in accrued bonus expense of $8 million, which totaled $24 million for the first six months of 2025, as well as a $2 million decrease in wages and benefits and many smaller decreases in several accounts totaling $8 million. This decrease was partially offset by an increase in advertising of $11 million primarily related to Deckorators.

Current wording

SG&A decreased by approximately $12 million, or 7%, in the first nine months of 2025 compared to the same period of 2024. The overall decrease was due to a decline in accrued bonus expense of $13 million, which totaled $32 million for the first nine months of 2025, as well as a $4 million decrease in wages and benefits, and many smaller decreases in several accounts totaling $12 million. These decreases were partially offset by an increase in advertising of $17 million primarily related to Deckorators.

Previous wording

Net sales in the second quarter of 2025 decreased 2% compared to the same period of 2024, due to a 4% decrease in selling prices, partially offset by an acquired business which contributed 2% to unit growth. Organic unit changes consist of decreases of 2% in Structural Packaging, primarily due to a decline in demand, offset by growth of 8% in Protective Packaging and 5% in PalletOne due to market share gains. The decrease in selling prices is due to competitive price pressure primarily in our PalletOne and Structural Packaging business units.

Current wording

Net sales in the third quarter of 2025 decreased 2% compared to the same period of 2024, due to a 3% decrease in organic unit sales, partially offset by an acquired business which contributed 1% to unit growth. Organic unit changes consist of a 5% decrease in Structural Packaging and 4% in PalletOne, partially offset by a 15% increase in Protective Packaging due to geographic expansion and market share gains.

Previous wording

Gross profits decreased by $13 million, or 16%, for the second quarter of 2025 compared to the same period last year. The change in gross profit was attributable to the following:

Current wording

Gross profits decreased by $4 million, or 5%, for the third quarter of 2025 compared to the same period last year. The change in gross profit was attributable to the following:

Previous wording

SG&A decreased by approximately $10 million, or 19%, in the second quarter of 2025 compared to the same period of 2024. Accrued bonus expense decreased approximately $3 million relative to the same period of 2024, and totaled $8 million for the quarter. The remaining decrease is attributable to an adjustment to reduce earnout expense by $1.5 million and many smaller decreases in several accounts.

Current wording

SG&A decreased by approximately $4 million, or 7%, in the third quarter of 2025 compared to the same period of 2024. The decrease is attributable to a decrease in wages and benefits of $1 million and many smaller decreases in several accounts totaling $4 million. Accrued bonus expense increased approximately $1 million relative to the same period of 2024 and totaled $9 million for the quarter.

Previous wording

Net sales in the first six months of 2025 decreased 2% compared to the same period of 2024, due to a 2% decrease in selling prices and a 1% decrease in organic unit sales, partially offset by an acquired business which contributed 1% to unit growth. Organic unit changes consist of a 4% decrease in structural packaging, primarily due to a decline in demand, partially offset by 10% unit growth in Protective Packaging and 2% unit growth in PalletOne due to market share gains. The decline in prices is due to competitive price pressure.

Current wording

Net sales in the first nine months of 2025 decreased 2% compared to the same period of 2024, due to a 2% decrease in selling prices, due to competitive price pressure, and a 1% decrease in organic unit sales, partially offset by an acquired business which contributed 1% to unit growth. Organic unit changes consist of a 4% decrease in structural packaging, primarily due to a decline in demand, partially offset by 12% unit growth in Protective Packaging due to geographic expansion and market share gains. Unit sales at PalletOne increased 5% due to acquisitions; there was no change in organic unit sales.

Previous wording

Gross profits decreased by $29 million, or 17%, for the first six months of 2025 compared to the same period in 2024. The change in gross profits was attributable to the following.

Current wording

Gross profits decreased by $33 million, or 14%, for the first nine months of 2025 compared to the same period in 2024. The change in gross profits was attributable to the following.

Previous wording

SG&A decreased by approximately $16 million, or 15%, in the first six months of 2025 compared to the same period of 2024. Accrued bonus expense decreased $5 million, and totaled $16 million for the six months of 2025. Additionally, our sales incentive compensation decreased by $2 million. The remaining decrease is attributable to many smaller decreases in several accounts.

Current wording

SG&A decreased by approximately $20 million, or 13%, in the first nine months of 2025 compared to the same period of 2024. Accrued bonus expense decreased $5 million, and totaled $25 million for the nine months of 2025. The remaining decrease is attributable to a $3 million decrease in insurance costs, a $2 million decrease in sales incentive compensation, a $2 million decrease in travel and entertainment expenses, $1 million decrease in wages and benefits, and many smaller decreases in several accounts totaling $7 million.

Previous wording

Net sales in the second quarter of 2025 decreased 4% compared to the same period of 2024 due to a 6% decrease in selling prices offset by a 2% increase in unit sales. We experienced unit increases of 8% in factory-built, 6% in commercial construction, and 11% in concrete forming. Our growth in factory-built is primarily due to an increase in industry production. These increases were partially offset by a 7% decrease in site-built, primarily due to softer demand for housing. As of June 28, 2025 and June 29, 2024, we estimate that our backlog of orders in our site-built housing business unit were $59 million and $82 million, respectively. The decrease in pricing was primarily due to competitive price pressure in our site-built business unit.

Current wording

Net sales in the third quarter of 2025 decreased 7% compared to the same period of 2024 due to a 5% decrease in selling prices, due to competitive price pressure in our site-built business unit, and a 2% decrease in unit sales. We experienced a unit sales decrease in site-built of 15% due to weaker demand for housing, which was partially offset by increases of 4% in factory-built, 13% in commercial construction, and 12% in concrete forming. Our growth in factory-built is primarily due to an increase in industry production. As of September 27, 2025 and September 28, 2024, we estimate that our backlog of orders in our site-built housing business unit were $53 million and $80 million, respectively.

Previous wording

Gross profits decreased by $25 million, or 20%, in the second quarter of 2025 compared to the same period of 2024. The change in our gross profit was comprised of the following:

Current wording

Gross profits decreased by $21 million, or 18%, in the third quarter of 2025 compared to the same period of 2024. The change in our gross profit was comprised of the following:

Previous wording

SG&A decreased by approximately $10 million, or 13%, in the second quarter of 2025 compared to the same period of 2024. Accrued bonus expense declined by $6 million and totaled $10 million for the quarter. The decline in SG&A was also attributable to a decline in our sales incentive compensation totaling $2 million and many smaller decreases in several accounts.

Current wording

SG&A decreased by approximately $10 million, or 15%, in the third quarter of 2025 compared to the same period of 2024. Accrued bonus expense decreased by $3 million and totaled $10 million for the quarter. The decrease in SG&A was also attributable to a decrease in wages and benefits of $2 million, bad debts of $2 million, and many smaller decreases in several accounts totaling $3 million.

Previous wording

Net sales in the first six months of 2025 decreased 2% compared to the same period of 2024 and consisted of a 5% decrease in selling prices, partially offset by a 3% increase in unit sales. Unit changes within this segment consist of increases of 10% in factory-built, primarily due to an increase in industry production, 7% in concrete forming, and 5% in commercial construction. These increases were partially offset by a unit decline of 6% in site-built housing due to lower demand.

Current wording

Net sales in the first nine months of 2025 decreased 4% compared to the same period of 2024 and consisted of a 5% decrease in selling prices, partially offset by a 1% increase in unit sales. Unit changes within this segment consist of increases of 8% in factory-built, primarily due to an increase in industry production, 8% in concrete forming, and 8% in commercial construction. These increases were offset by a unit decline of 9% in site-built housing due to lower demand.

Previous wording

Gross profits decreased by $49 million, or 20% for the first six months of 2025 compared to the same period of 2024. The change in our gross profit was comprised of the following:

Current wording

Gross profits decreased by $69 million, or 20% for the first nine months of 2025 compared to the same period of 2024. The change in our gross profit was comprised of the following:

Previous wording

SG&A decreased by approximately $16 million, or 11%, in the first six months of 2025 compared to the same period of 2024. Accrued bonus expenses decreased $10 million and totaled $20 million for the first six months of 2025. The decline in SG&A was also attributable to a decline in our sales incentive compensation totaling $3 million and many smaller decreases in several accounts.

Current wording

SG&A decreased by approximately $26 million, or 12%, in the first nine months of 2025 compared to the same period of 2024. Accrued bonus expenses decreased $13 million and totaled $30 million for the first nine months of 2025. The decrease in SG&A was also attributable to a decrease in our sales incentive compensation totaling $4 million, wages and benefits totaling $3 million, travel expense totaling $2 million, and many smaller decreases in several accounts totaling $4 million.

Previous wording

Earnings from operations decreased in the second quarter of 2025 compared to 2024 by $16 million, or 31%, due to the factors mentioned above.

Current wording

Earnings from operations decreased in the first nine months of 2025 compared to 2024 by $44 million, or 31%, due to the factors mentioned above.

Previous wording

Effective tax rates differ from statutory federal income tax rates, primarily due to provisions for foreign, state and local income taxes and permanent tax differences. Our effective tax rate was 23.6% in the second quarter of 2025 compared to 25.1% in the same period of 2024 and was 22.5% in the first six months of 2025 compared to 21.5% for the same period in 2024. The decrease in our effective tax rate for the second quarter was primarily due to one-time state income tax benefits recorded as discrete items in 2025. The increase in our effective tax rate for the first six months of 2025 was primarily due to a decrease in our tax deduction from stock-based compensation accounted for as a permanent difference.

Current wording

Effective tax rates differ from statutory federal income tax rates, primarily due to provisions for foreign, state and local income taxes and permanent tax differences. Our effective tax rate was 23.8% in the third quarter of 2025 compared to 24.2% in the same period of 2024 and was 22.9% in the first nine months of 2025 compared to 22.3% for the same period in 2024. The decrease in our effective tax rate for the third quarter was primarily due to an increase in our tax deduction from stock-based compensation accounted for as a permanent difference. The increase in our effective tax rate for the first nine months of 2025 was primarily due to an increase in foreign subsidiary income taxed in the US and a decrease in our tax deduction from stock-based compensation for the year. A significant amount of stock-based compensation vested in the first quarter of 2024, which decreased the prior year effective tax rate in comparison to 2025.

Previous wording

Due to the seasonality of our business and the effects of the Lumber Market, we believe our cash cycle (days of sales outstanding plus days supply of inventory less days of payables outstanding) is a good indicator of our working capital management. As indicated in the table below, our cash cycle increased to 59 days from 56 days during the second quarter of 2025 and increased to 60 days from 59 days during the first six months of 2025 compared to the same periods of the prior year.

Current wording

Due to the seasonality of our business and the effects of the Lumber Market, we believe our cash cycle (days of sales outstanding plus days supply of inventory less days of payables outstanding) is a good indicator of our working capital management. As indicated in the table below, our cash cycle increased to 64 days from 59 days during the third quarter of 2025 and increased to 61 days from 59 days during the first nine months of 2025 compared to the same periods of the prior year.

Previous wording

The increase in our days supply of inventory for the quarter and first six months of 2025 is due to slower inventory turns in our Retail and Packaging segments. The increase in our days of sales outstanding is primarily due to our Retail and Packaging segments. We continue to focus on past due account balances with customers, and the percentage of our accounts receivable that are current was 94% at the end of the second quarter of 2025 and 2024.

Current wording

The increase in our days supply of inventory for the quarter and first nine months of 2025 is due to slower inventory turns in our Retail and Packaging segments primarily due to an increase in safety stock as we planned for supply chain disruption in certain items resulting from tariffs. Our days of sales outstanding remained flat compared to the prior year. We continue to focus on past due account balances with customers, and the percentage of our accounts receivable that are current was 94% and 93% at the end of the third quarter of 2025 and 2024, respectively.

Previous wording

In the first six months of 2025, our cash flows from operations were $113 million and were comprised of net earnings of $180 million, $99 million of non-cash expenses, offset by a $166 million increase in working capital since the end of December 2024 due to seasonal demand. Our cash flows from operations decreased by $126 million compared to the same period of last year primarily due to the increase in our investment in net working capital since year end, which was $67 million higher in 2025 compared to 2024. We anticipate the seasonal increase in net working capital in 2025 will be converted to cash by the end of the third quarter, as well as approximately $40 million of cash flow benefits from the OBBBA in the third and fourth quarter.

Current wording

In the first nine months of 2025, our cash flows from operations were $399 million and were comprised of net earnings of $256 million and $148 million of non-cash expenses, offset by a $5 million increase in working capital since the end of December 2024 due to seasonal demand. Our cash flows from operations decreased by $99 million compared to the same period of last year primarily due to the decline in our net earnings as well as the increase in our investment in net working capital since year end, which was $19 million higher in 2025 compared to 2024. We anticipate the seasonal increase in net working capital in 2025 will be converted to cash by the end of the year.

Previous wording

Purchases of property, plant, and equipment of $130 million comprised most of our cash used in investing activities during the first six months of 2025. Outstanding purchase commitments on existing capital projects totaled approximately $133.4 million on June 28, 2025. Capital spending primarily consists of several projects to expand capacity to manufacture new and value-added products, primarily in our Packaging segment and our Site-Built and Deckorators business units, to achieve efficiencies through automation in all segments, and make improvements to a number of facilities. We intend to fund capital expenditures and purchase commitments through our operating cash flows for the balance of the year.

Current wording

Purchases of property, plant, and equipment of $206 million comprised most of our cash used in investing activities during the first nine months of 2025. Outstanding purchase commitments on existing capital projects totaled approximately $109 million on September 27, 2025. Capital spending primarily consists of several projects to expand capacity to manufacture new and value-added products, primarily in our Packaging segment and our Site-Built and Deckorators business units, to achieve efficiencies through automation in all segments, and make improvements to a number of facilities. We intend to fund capital expenditures and purchase commitments through our operating cash flows for the balance of the year. Cash used for acquisitions during the first nine months of 2025 amounted to $18 million (refer to footnote F to our condensed consolidated financial statements).

Previous wording

Cash flows used in financing activities during the first six months of 2025 primarily consisted of the following:

Current wording

Cash flows used in financing activities during the first nine months of 2025 primarily consisted of the following:

Previous wording

At the end of the second quarter of 2025, we had approximately $2.1 billion in total liquidity, consisting of our cash, remaining availability under our revolving credit facility, and a shelf agreement with certain lenders providing up to $575 million in remaining borrowing capacity.

Current wording

At the end of the third quarter of 2025, we had approximately $2.3 billion in total liquidity, consisting of our cash, remaining availability under our revolving credit facility, and a shelf agreement with certain lenders providing up to $575 million in remaining borrowing capacity.

Previous wording

We believe improvements in demand in the end markets we serve and effectively executing our strategies will allow us to achieve our long-term goals. However, in the short-term, demand in our markets has contracted due to a variety of factors, which will continue to impact our results and vary depending on the severity and duration of this cycle. As a result of these more challenging conditions, we have developed and are executing plans for reducing costs, eliminating excess capacity, divesting under-performing assets, and exiting business that does not meet our profitability targets. Our goal through these actions is to lower our cost structure and improve our operating profits by $60 million by year-end 2026. We anticipate benefits of approximately $43 million by the end of 2025, including $13 million from planned capacity reductions and approximately $30 million from planned SG&A cost reductions. The planned decreases will be partially offset by an anticipated $20 million increase in advertising costs in our Deckorators business unit to build our Surestone brand.

Current wording

We believe improvements in demand in the end markets we serve and effectively executing our strategies will allow us to achieve our long-term goals. However, in the short-term, demand in our markets has contracted due to a variety of factors, which will continue to impact our results and vary depending on the severity and duration of this cycle. As a result of these more challenging conditions, we have developed and are executing plans for reducing costs, eliminating excess capacity, divesting under-performing assets, and exiting business that does not meet our profitability targets. Our goal through these actions is to lower our cost structure and improve our operating profits by $60 million by year-end 2026. We anticipate benefits of approximately $44 million by the end of 2025, including $14 million from planned capacity reductions and approximately $30 million from planned SG&A cost reductions. The planned decreases will be partially offset by an anticipated $20 million increase in advertising costs in our Deckorators business unit to build our Surestone brand. In 2026, we believe the closure of our Bonner, MT facilities and shift of production to other facilities will increase our operating profits by approximately $16 million.